Dow Jones industrials cross 27,000 points for first time

In this photo provided by the New York Stock Exchange, Hyungsik Kim, center, founder and Chief Executive Officer of Qraft Technologies of Seoul, South Korea, and guests, join Douglas Yones, foreground, third from right, on the podium for the closing bell at the New York Stock Exchange, Thursday, June 11, 2019 in New York. The Dow Jones Industrial Average climbed above 27,000 for the first time after a turbulent day on Wall Street, closing at 27,088.08. (Courtney Crow/The New York Stock Exchange via AP)

The latest gains extended a winning streak for stocks into its third day. Stocks have been trending higher for much of the week as investors have grown more confident that the Federal Reserve may cut interest rates for the first time in a decade as soon as the end of this month.

"Sure, 27,000 is just a number and in the whole scope of things isn't meaningful," said Ryan Detrick, senior market strategist for LPL Financial. "What it is though is a reminder for all investors that this bull market has ignored all the scary headlines for years and the dual benefit of fiscal and monetary policy could mean it has a lot longer to go than most expect."

The S&P 500 rose 6.84 points, or 0.2%, to 2,999.91. The index set three straight record highs last week.

The Dow gained 227.88 points, or 0.8%, to 27,088.08. The Nasdaq composite gave up an early gain, sliding 6.49 points, or 0.1%, to 8,196.04. The Russell 2000 index of smaller company stocks dropped 7.13 points, or 0.5%, to 1,557.92.

Major stock indexes in Europe fell.

Stocks rose from the get-go Thursday as investors looked ahead to Fed Chairman Jerome Powell testifying before a Congressional committee for the second straight day.

Powell stressed that the Fed is prepared to cut interest rates to support the economy, raising hopes that the first reduction in its key policy rate in a decade could happen later this month.

He noted that "uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook."

New government data released Thursday showed consumer prices rose in June from a year earlier. The bump in inflation wasn't expected to give the Fed reason to reconsider whether it should lower rates, if necessary. Inflation has remained muted through much of the economy's 10-year expansion, which Powell has said cited as a justification for potentially lowering rates.

The early rally weakened by early afternoon after bond yields spiked following weak demand at an auction for 30-year Treasurys. That pulled bond prices lower, driving the yield on the benchmark 10-year Treasury note to 2.14% from 2.06% late Wednesday, a big move.

"The markets were higher at the beginning of the day based on Powell's testimony and him confirming what the futures markets have been telling us for a whole month: That we were going to get a rate cut," said Randy Frederick, vice president of trading & derivatives at Charles Schwab. "But then we had this Treasury auction, which apparently didn't go so hot."

The surge in bond yields marked a reversal from recent weeks, when many investors funneled money into bonds and other less-risky assets amid growing anxiety over the U.S. trade conflicts and signs of a slowing global economy.

The move had a swift effect on real estate stocks, utilities and other high-dividend stocks that lose their appeal when bond yields rise. Real estate investment trusts took the heaviest losses. Iron Mountain slid 7.5%.

Banks benefited from the surge in bond yields. When bond yields climb, they push up the interest rates that lenders charge for mortgages and other loans, making them more profitable. Bank of America rose 1.2% and Goldman Sachs gained 2.6%.

Pharmaceutical makers dropped after the White House scrapped a plan to overhaul a system of rebates those companies pay to insurers and distributors. Merck & Co. dropped 4.5%.

Companies have been lowering expectations for how much profit they made in the quarter. Wall Street now projects that overall S&P 500 company earnings for the quarter fell 2.6% from a year earlier, according to FactSet. As recently as the end of March, earnings were forecast to be down only 0.5%.

This could be the first time in three years that S&P 500 companies report a back-to-back decline in overall earnings.

"The bars for earnings have been set sufficiently low to keep expectations in check," said Jamie Cox, managing partner for Harris Financial Group. "We will hear lots about the impact of tariffs, but not much else."

The Associated Press is an American multinational nonprofit news agency headquartered in New York City. The AP is owned by its contributing newspapers, radio, and television stations in the United States, all of which contribute stories to the AP and use material written by its staff journalists.

As Democratic presidential candidates debate the federal government's role racially integrating public schools, federal intervention and court-ordered desegregation live on in one Mississippi Delta town

The British navy says it has prevented three Iranian paramilitary vessels from disrupting the passage of a British oil tanker in the Strait of Hormuz, a day after Iran's president warned of repercussions for the seizure of its own supertanker

A man in a vegetative state for 11 years who was at the center of a bitter dispute that divided his family and French courts, and provoked national soul-searching over how to deal with terminally ill patients, has died

The White House says President Donald Trump is withdrawing a plan that would have eased the financial bite of drug costs for people on Medicare by allowing them to receive rebates that drugmakers now pay insurers and middlemen

The British navy says it has prevented three Iranian paramilitary vessels from impeding the passage of a British commercial ship in the Strait of Hormuz, a day after Iran's president warned of repercussions for the seizure of its own supertanker

As Democratic presidential candidates debate the federal government's role racially integrating public schools, federal intervention and court-ordered desegregation live on in one Mississippi Delta town

A spokesman for the Royal Gibraltar Police says officers have arrested the captain and chief officer of a supertanker suspected of breaching European Union sanctions by carrying a shipment of Iranian crude oil to Syria